Home »Stocks and Bonds » Pakistan » Government obtained over Rs 22 trillion loans from SBP in four years
The ruling Pakistan Muslim League-Nawaz (PML-N) government has obtained Rs 22,042.2 billion loans from the State Bank of Pakistan during last four years. According to documents, the PML-N government obtained Rs 2274.7 billion from January 2013 to June-2013, Rs 592 Rs 5.4 billion from July 2013 to June 2014, Rs 5210.6 billion from July-2014 to June-2015, Rs 4294.3 billion loan from July-2015 to June-2016 and Rs 4337.2 billion loan from July-2016 to March-2017.

Thus, the total amount of loan stands at Rs 22,042.2 billion, while an amount of Rs 853.3 billion has been paid as interest on these loans. The public debt is mainly obtained to finance fiscal deficit which is approved by the Parliament. The government borrows from different sources (domestic, external) to finance its fiscal deficit. Domestic sources mainly include commercial banks, the SBP and various national savings schemes. The government came to office to re-fix the economy and bring macroeconomic stability. Prior to 2013, the country was facing serious challenges like macro-economic instability, frequent power outages and dire security situation.

Agriculture, large scale manufacturing and services sectors were all underperforming. The foreign exchange reserves position had reached precarious levels and the interest rates and inflation were high. The external sector was heavily out of balance and the performance of state-owned enterprises had severely deteriorated.

The present government has paid attention to all these issues and achieved considerable success in resolving them. Necessary steps were taken to avoid predicted default and ensure fiscal discipline and consolidation. In this regard, structural reforms, including restructuring pubic sector enterprises, and other measures including reduction in un-targeted subsidies and broadening of the tax base were undertaken. Measures were also taken to build foreign exchange reserves, contain inflation and overcome energy shortages. Despite repayments of foreign loans amounting over US$ 13.6 billion by the present government which was mainly obtained by the previous governments, the foreign exchange reserves presently recorded at over US$ 21.5 billion up from US$ 11 billion as at end June, 2013.

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